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Threat to move Hobbit was real, says Jackson

A day out from the world premiere of the first instalment in the Hobbit trilogy, director Sir Peter Jackson has revealed how close the movies came to being made outside New Zealand.

The film-maker said that at the height of a labour dispute between his production company and the actors' union there was a real danger the films would be moved offshore.

He said a box from Warner Bros arrived filled with a film scout's shots of locations in England and Scotland matching scenes in the screenplay.

"It was to convince us that we could easily just go over there and shoot the film," he told Radio New Zealand.

Sir Peter rejected the notion that the movie studio was bluffing in its threat to take the production abroad.

"They don't send someone around the UK with a camera for what must of taken them three or four weeks to compile all these photos - they were very, very serious."

The Government stepped into the row to change employment law to classify all film workers as contractors by default and also gave an extra subsidy of up to $US15 million per movie.

Sir Peter says it was imperative for New Zealand to ensure it was a financially viable environment for films to be made.

"Tax incentives are part of the film industry around the world.

"If New Zealand, no matter what Government is in charge of this country, if it wants to be in the business of making films, it's got to be aware of what other parts of the world, and American states are offering up as tax incentives ... if you want to be in the game you have be in the game."

Financial statements reveal Warner Bros subsidiary 3 Foot 7 has received $67.1 million in tax rebates over the last two years.

The Hobbit: An Unexpected Journey reaped $46.9 million from New Zealand's large budget screen production grant in the 12 months ended March 31 after receiving $20.2m in 2011.